A lot goes in to running a successful franchise. We may very well know this but have you ever given much thought to what exactly is required to run a successful franchise business? Think about the last time you visited your local McDonald’s. Between the menu, the crew members, the kids playground, and of course your burger, fries and soft drink, everything falls on the owner. When it comes to making mornings, afternoons and evenings run silky smooth, each individual McDonald’s franchisee has some really big shoes to fill and I’m not talking about Ronald McDonald’s!
But this post isn’t about running a succesful McDonald’s franchise. This post is about running any successful franchise. If you’re wondering what you need to know before embarking on a franchise operation, read on to find out.
1. The cost. Every franchise, and the amount of money you need to invest is different. Not only knowing the upfront costs required to run a specific franchise, but also the recurring costs are crucial to getting started since you’ll have to ensure you have enough capital to begin. The franchise’s UFOC is the best place to start researching what your expenses will be like. Be sure to find out what is included in the initial investment as some franchises may not include items such as equipment, location, and rent in your overall investment figure.
2. The workload. As mentioned previously we all know that running a business is hard work whether it’s a franchise, or a mom and pop shop. However if you consider yourself to be a “weekend warrior” it’s best not to choose a retail or restaurant franchise which will have you working overtime on evenings, weekends and holidays. That said, most successful franchises are run by full-time owners who handle all facets of the business including finances, merchandising, and housekeeping. Much of this work is done after hours so you must be willing to let the business bleed in to your personal life.
3. The marketing. Some people are just natural at sales. Others shy away from it. If you plan on entering the franchise game to hone your advertising and marketing skills, be sure to find out just how much control you’ll have over the marketing decisions. Some franchisors don’t allow individual franchisees to do any local marketing for their business, while others may give you the reigns as long as you’re willing to invest your own money for advertising. Either way, it’s best to know your limitations up front and be prepared for any additional expenses that come your way when promoting your business.
4. The commitment. Before buying in to any franchise, it’s imperative to research your territory. Things to consider include, population, household demographics, and other successful franchises in the area. However, before you decide on a given territory you must first understand the term requirements of the franchise you’re interested in. After all, many franchises require you to sign a 10-year term. If you’re going to be in it for the long haul, you might as well enjoy the area you choose to grow your business in.
5. The likelihood of success. This goes hand in hand with the commitment. If you really want to succeed at running a franchise on your first go you will do your homework and not only choose the right franchise for the right area, but run with one that has a proven track record. Startups can be exciting but they’re extremely risky as their franchise model may be too new, or even too frail to invest in. If you’re a rookie franchisee it’s best to stick with one that is well established with successful operations throughout your region.
If you could choose to run any franchise what would it be and why? Leave a comment below. If the idea of starting your own business is interesting to you, head on over to our Business Opportunity page to see a list of the variety of franchises available along with their initial investment level.