It takes a lot of work to determine the best fit for the franchise and the potential franchisee.
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Purchasing the right franchise takes a lot of work. Fortunately, most franchises offer potential franchisees individual consulting, guidance and even discovery days to ensure quality preparation and knowledge before a franchise agreement. A discovery day is a great opportunity to evaluate a franchise before making the final decision to sign a franchise agreement. But what should a potential franchisee consider before starting the negotiation of a franchise or attending a franchise discovery day?
1. Change your perceptions of purchasing a franchise and the commitment it will take.
Owning a franchise business can take as much time and commitment as starting a new business, even with the support structure from a corporate office. Be prepared at the launch for longer hours than anticipated, the need for more capital to grow, workflow disruptions and other issues that may arise. Processes will need to become more streamlined and doing so may take more time and effort than originally planned.
2. Get ready for potential ownership with knowledge and due diligence.
Do the due diligence necessary and prepare accordingly. From Entrepreneur and other resources, any potential franchise owner needs to study and prepare, especially in subject areas of business that do not play to the owner’s strengths. While the owner should have a growth strategy that allows for additional employees to help manage different areas of the business, a majority of new franchises start small, and owners manage multiple roles.
3. Embrace the learning curve in owning a new franchise.
Any new business brings difficulties. For many franchisees, this may be the first time they have entered a particular industry. Even for the experienced entrepreneur, a new business brings new challenges. While uncomfortable at times, owning a new franchise is a learning process, and embracing this process only helps the entrepreneur, the employees, the franchisee and the franchisor. Ask questions and determine the support structure from the franchisor, and ask other franchisees how the corporate office adheres to that structure.
4. Determine the franchise’s flexibility and adaptability through the changing economy.
Where can the franchise add value to the local market and the broader franchise system? Are there work-from-anywhere options for the workforce in the franchise? Is there a structure and a culture in place that can take future, unexpected events and pivot to help franchisees succeed? Coming out of the pandemic, a potential franchisee must consider future business interruption events, and how the franchise can pivot through such events.
5. Determine what a win looks like.
What does a win look like in six months of ownership? What does year-over-year growth look like? What does it take to grow after a year, and if an exit is part of the strategy, what needs to happen to ensure a successful exit? Before attending a discovery day, determine what success looks like and then evaluate the franchisor’s processes, growth model and market strategies. From there, a potential franchisee can determine if the franchisor’s strategies and values align with the vision of franchise ownership.
6. Map out potential obstacles the business will face in the market.
From competitors, business interruptions and the unexpected, obstacles will happen. Anticipate adversity and be prepared to play offense when it happens. Having the right processes and being able to effectively execute will only propel the business forward. In addition, do not be fearful of failure. Failure will happen, and the best way to fail is to fail fast, quickly recover and move on, and adapt from the failure.
7. Face fears and anticipate misgivings in the purchase of a franchise.
What do potential regrets look like, and how would the regrets be overcome? Make a detailed list before attending a discovery day and see how the corporation alleviates those fears. Other franchisees are also a great resource, and most will have similar experiences. Ensure that fears and doubts are overcome after discovery day. If not, review other options or franchises.
Owning a franchise business is challenging but also rewarding. Different franchise models, such as fully present, semi-absentee and others, can allow the franchise owner a greater work-life balance. Perhaps there are other aspects to the business that allows for great flexibility, freedom or ability to pursue true passions and work important to the franchisee. But no matter the franchise, enjoy the rewards that being a franchisee can bring.