12 SIGNS THAT YOU'LL SUCCESSFULLY OWN A FRANCHISE
Franchising continues to be one of the most popular choices for people who are looking to start their own businesses, but want to have the backing and proven model for success that comes with being part of a successful brand. But not everyone who enters the world of franchising will succeed. It takes a certain personality type to thrive — someone who is self-motivated, driven, willing and able to follow rules, a strong marketer, and extremely dedicated. Even if that describes you, you’ll also need a certain amount of startup money to fund the venture. Moreover, it’s commonly said in franchising circles that someone who is prone to “go rogue” will not necessarily make the best franchisee because they will always be looking for ways to do things their way or “better” than the franchisor has stipulated.
There is no formula that defines the perfect franchisee. A franchisor never knows who is going to be on the other end of the franchise application, so what they do is provide clear descriptions of their expectations, rules, regulations, and standards, and allow potential franchisees to use that information in order to predict the likelihood that they’ll be successful with that particular brand. However, there are some characteristics or traits that all successful franchisees tend to have in common. Below, we’ll explore 12 signs indicating that you’ll likely be successful as a franchisee.
You've Thoroughly Researched Your Opportunities
One of the most important things a potential franchisee can do to start out on the right foot is spend an extensive amount of time researching different franchise opportunities to find the one that best fits their interests, background, and level of experience. You must make sure the business you choose is one you can sink your heart and soul into, because franchise agreements are generally long-term. Ten years is common, and some brands’ agreements contain an even longer commitment clause. If you can’t picture yourself committed to a particular franchise business for many, many years, then it’s probably not the right one for you.
Your chosen business also has to be one that you can financially afford. It’s a common mistake to simply look at the initial franchise fee, but you must also consider additional startup costs that will often far exceed that fee. These costs may include funds for the location, equipment, supplies, inventory, build-out, insurance, marketing, and monthly royalties, plus personal living expenses for the first six to twelve months. To learn more about conducting an in-depth examination of your finances, check out our recent guide.
You've Honed Your Business Skills
Franchisors will provide you with a road map for success via their brand and business model, but don’t count on them to teach you the basics of business, including the key principles of accounting, hiring and firing, marketing, and networking. If you don’t already have a solid foundation of business skills, it’s time to do some learning, sharpen your mind, and prepare yourself for what lies ahead. You’ll be responsible for every duty that comes with running your own business, so any gaps in your skill set will need to be addressed before you jump in.
You Understand Your Industry
Along with researching your future brand, you must make sure you understand its place in the industry:
- Who is the target customer?
- What is the opportunity?
- Who is the competition, and what are they doing to succeed and attract customers?
- What are their advantages versus those of your brand?
- Where are the gaps in the market?
- What will be your biggest challenges?
The more you know, the better your decisions will be!
You Have Passion and Tenacity
Those who succeed in owning their own business — whether it’s a stand-alone business or a franchise — tend to have two qualities in abundance: passion for what they do and tenacity. They live and breathe their business. They are willing to do whatever it takes to succeed, whether that means working long hours to push through difficulties, making financial sacrifices, or courageously jumping any other hurdles they encounter throughout their journey. To be a successful business owner, you have to have a do-whatever-it-takes attitude. Some days you’ll be the boss; other days, you may be the one cleaning up the parking lot. If you don’t have passion or tenacity as a franchisee, then chances are, you haven’t found the right brand for you.
You See Things From a Wide Perspective
As a franchisee, you will be part of a bigger picture: the entire franchise brand. Now’s as good a time as any to insert some well-worn clichés: You are one of many. The whole is only as strong as its weakest link. A rising tide lifts all boats. These may sound silly, but they’re all true. The success of an entire franchise brand always depends on the success of each individual franchisee, and one bad one can have a powerful, far-reaching negative impact. This is true today more than ever, thanks to social media, online reviews, and the speed at which things that are posted on the Internet can go viral. It doesn’t matter if an incident involving your brand happens way across the country — if it’s connected to the brand name, you will be impacted in some way. As part of a franchise business, understanding that your success (or lack thereof) will strengthen (or weaken) the brand overall is essential.
You've Chosen Your Location Carefully
This one is not going to apply to every brand, so if you’re leaning toward a franchise concept that is not location-dependent or has locations that are predetermined by the franchisor, you can skip this section. But if you are thinking of joining a concept with which you'll have a say in determining your location, it will serve you well to choose that location very carefully. This can be one of the most important decisions you make early on about your business.
For each potential location, look at the demographics of the area, the potential customer base, the proximity to competitors, the traffic flow, and the makeup of other businesses nearby. If the likelihood of getting traffic to your location seems to be limited, then your success rate will go down, so be sure to use the location selection tools and support available from the franchisor to help yourself make the best decision possible.
You Have a Solid Business Plan
Even though you’ll be joining a proven franchise system that has plans and processes already in place, you' will still need to have your own individual business plan. Your plan must describe in detail how you’re going to manage your business, grow it, control your finances, and so on. Remember, you’ll be running your own business; it just so happens to be under the umbrella and within the boundaries of the franchisor. With a business plan, you'll be able to control the business well, create workable systems, and focus on actions that will lead to growth and profitability. You will also be better able to handle any setbacks that arise.
You're Willing to Be Involved at All Times
When you’re a new franchisee, you must be 110 percent involved in your business. You must know every aspect of the business inside and out, including every little thing that is going on within your location at all times. It’s necessary that you know what’s happening at the franchisor level, too. That means taking every opportunity to provide input or feedback; staying current on news, updates, education, and training; and generally becoming an expert in regard to your brand.
In the beginning, franchising definitely won’t be as simple as hiring a manager and sitting back and watching the money roll in. Once you’ve been a franchisee for a while and have maybe even opened several locations, you’ll then be able to take a step back and oversee things from a wider perspective. You will have people you trust in place to help with the small daily details. But regardless of your level of growth and success within your brand, it’s important to continually stay in tune with what’s going on at all levels of your business.
You've Hired the Right Employees
If you’re part of a franchise business in which you will have employees, it’s essential that you hire the right ones: people who are reliable, trustworthy, and motivated team players. If you have a solid team working for you, you’ll have a lot less stress on your shoulders and will be able to concentrate on running the business from a bigger-picture perspective rather than being concerned with operating the register or preparing the food.
Your Focus Is on the Customer
Providing good customer service is one of the things that may make or break your business. No matter what industry you choose, you will be dealing with customers, and providing the best level of service possible is what will keep them coming back and telling their friends about you. Your customers can be your best referral network — your unofficial sales team! With that being the case, it’ll be in your best interest to do everything you can to make sure their experiences with you are the best they can be.
You Are Able to Build Connections
In order to help grow your customer base, referral network, and following of loyal fans, you’ll need to concentrate on building connections (or, in other words, relationships). There are many different types of connections, including those with employees, customers, other businesses, and members of the community, and each one will play an important role in your long-term success. Building connections doesn’t necessarily involve spending a lot of extra money, but it does involve being visible, meeting new people, expanding your professional network, and in general, constantly promoting your business.
You've Taken Advantage of the Tools and Support Offered
Remember that, at one time or another, the franchisor has been in your shoes. They’ve started out and struggled to succeed. Eventually, they designed and implemented the systems and tools they needed to become successful, and now, they’re sharing those with you. Therefore, it makes sense to take advantage of all the applications, programs, training, and support that the franchisor has to offer in order to help your own business grow. Chances are, they’ve encountered any dilemma that you could possibly describe, or, if you have a specific question, they’ll be able to point you in the right direction. With their guidance, you’ll find that you’re able to move more smoothly through difficult situations.
To make the most of the franchisor’s knowledge, ensure that you participate in the organization’s Intranet, read any publications or bulletins that are released, know what’s in the company manuals, and take part in all training that’s offered to you.
12 Signs That You'll Be a Successful Franchise Owner: A Brief Rundown
- You've thoroughly researched your opportunities and have chosen an affordable franchise you can commit to long-term
- You've honed your business skills and have addressed any gaps in your skill set
- You understand your industry and your business's place within it
- You have passion and tenacity when it comes to running your business
- You are able to view your brand from a wide perspective, understanding your place in an entire network of franchisees
- If you've been given the choice, you've chosen your location carefully, paying attention to demographics and competitors
- You've created your own detailed business plan separate from that of the franchisor
- You're willing to play a hands-on role in your business at almost all times
- You've hired a strong team of reliable employees
- You're focused on providing excellent customer service
- You're able to build connections with other local business owners and members of your community
- You've made use of the tools and support that the franchisor has offered you
It's All Up to You
Keep in mind that it's not necessary to have every single one of these traits in order to become a successful franchisee, and, along the same lines, possessing them all will not guarantee your success. However, if you can work to cultivate these twelve qualities or abilities within yourself to the greatest degree possible, you'll dramatically increase your chances of cruising smoothly through any of the new-business hurdles you encounter and coming out even stronger (and quite possibly, richer) on the other side. Who knows — with some experience under your belt, you may even end up creating your own successful franchise empire someday.
image 1: Jonathan McPherskesen (Creative Commons BY-NC-SA); image 2: Philip Taylor — PT Money (Creative Commons BY); image 3: Blake Facey (Creative Commons BY-NC-SA)