5 Things People Will Never Tell You About Running A Franchise

5 Things People Will Never Tell You About Running A Franchise

You’ve done your share of research and have come to the realization that franchising is the direction to go in. Although you’re nervous and giddy because you’re about to go down uncharted territory, your friends and family are excited to see what lies ahead on this journey.

You’ve read up everything pertaining to certain evident red flags that might become hurdles on your path and you’ve taken the necessary steps to steer clear from them. You think you’re sort of prepared or at least can anticipate what is coming but there are some lesser known facts about franchising that you should know before beginning this endeavour of yours.

Read ahead to find out what franchising is really like, apart from the oh so glorious image of it, get one with the on ground reality!

What are franchise experts keeping from you?

1 Intellectual Simulation and Priorities

If you’re jumping into the field of franchise investment, your first thought would probably be “are my educational qualifications enough?”. There are a vast number of franchises that are professionally oriented but in contrast to this, the number of franchises that involve basic services associated with retail and business outnumber the ones where you need to be highly educated.

You need only a minimum level of education and sophistication to pull through. You must remember one thing, if a business line seems complicated and would be difficult to replicate in one way or another, it simply cannot be franchised. Franchising only works for easily accessible and serviceable businesses.

Franchising is like taking care of a baby, your franchise is your baby and you must indulge in all activities related to its progress and wellbeing, however inconsequential and below your paygrade and status they might seem.

Being a franchise owner means treating each aspect of the business as the most important one. If you’re a highly educated person, you might start feeling the boredom creep up on you within a mere 2-3 year long time span and then what? Because of the permanent nature of your investment, this becomes an imperative initial consideration.

Franchising will become such an integral part of your life, you will be forced to devote all your time to it. If you’re thinking you will still be able to divide your time equally among the things you did before you invested in a franchise, then you’re in for some major disappointment. Franchising, especially retailing and restaurant franchises ask for long, taxing hours to get the job done.

There is even a clause mentioned in most franchise agreements signed between the franchisor and franchisee that tells you to devote your time and undivided attention to the franchise.

2. Dealing with Public and Getting a Corporate Job Back

Most franchises are associated with dealing with the public in more than one way. The public has the right to scrutinize every move of yours and that can be daunting sometimes. Their comments and opinions about you and your franchise can be crude and sometimes vicious at times.

They can break your morale into pieces and you would feel so unmotivated and low. Your best bet is to not let this get to you. You have to believe in yourself and your cause and let that flow instead of the negativity coming towards you.

In case you do feel like this is not something you want to do anymore, you would want to return to your corporate ways. If you’re still young and have appropriate skills in your chosen field then finding a corporate job would be like a walk in the park. It might take some time and you would not return for some months but it will get better for sure.

Having said this, the most difficult part of coming out of a franchise is not finding another job but ending the agreement. Most often, a franchise agreement is terminated only if another buyer is ready to take it from you. Otherwise, you’re tied down with it and while your franchisor would most often than not help you in looking for an able successor, most of the role has to be played by you and you alone. Having said this, the most difficult part of coming out of a franchise is not finding another job but ending the agreement. Most often, a franchise agreement is terminated only if another buyer is ready to take it from you. Otherwise, you’re tied down with it and while your franchisor would most often than not help you in looking for an able successor, most of the role has to be played by you and you alone.

3. Monotony and Cost of Franchise

When opening a franchise you might be met with the sense of monotony because of being confined to very limited territory. You’re not at free will to open any new units and are not even allowed to advertise beyond it. This might feel like impending doom and make you feel stuck. So if you’re going to do this, do it with absolute certainty.

This thought would also give way to your choice of franchise. Owing to the fact that investing in a franchise is more permanent than a regular startup, you need to choose the field wisely. It is always a good thing to proceed with caution and think about potential hidden costs that you could incur during the initial few years of the franchise.

Hidden costs can include rent, security, utility deposits, legal fee, debt service, life, disability insurance, and several others.

4. Franchise Management and Fundamental Business Model

A decade or something ago, it was not common to see company franchises unless there were a bunch of outlets in different parts of the country but times have changed. Today however, a fledgling company would easily consider franchising despite having just two or three outlets in a relatively small area.

What should be noted here is that business models are region centric so what plays out well in a certain region might not give the best results in some others. Business models only work to give a rough estimate regarding the success of the overall company and not necessarily about a particular franchising outlet.

When it comes to business models and business efficiency, it is imperative to also see who all you are going to be working with. Key Managers are going to be your biggest support system so before signing the agreement, make sure you have a detailed insight into who they are.

5. Right Territory and Future Expansion

The biggest advantage you can give yourself before you even invest in a franchise is studying the success of the company in terms of each outlet. A location based assessment is essential. This type of assessment would help you recognise potential target audience and how the audience perceives a possible franchise.

You can make your franchise the most ideally located with these data points. While your franchisor and parent company is your most major support system, this scale can tip in the opposite direction very easily with just a slight shift in the market.

Your parent company can easily become your biggest enemy if the market forces it to do so. To avoid this, be clear with the plans of the franchise beforehand. Ask the relevant questions without hesitation. You can include the following points in your questioning:

• Will they ever be open to the idea of starting company outlets as opposed to franchises? If yes, make sure they don’t open them close to you.
• Are they looking to shift to a more online version of customer service? You must be the first point of contact when it comes to customers’ pain points.
• Will they ever wander off in a different direction to offer somewhat related but not completely same products and services under another trademark? This would harm your business in a large gamut of ways.

Final Verdict

Investing in a franchise is no cake walk. It requires your highest level of focus and attention for detail in order to avoid unnecessary obstructions and stumbling blocks. Make sure to give thought to each one of these aspects before making a final call.