A guide to getting the most out of your franchise investment

11/06/2018 17:00 | Start a business

Which franchise to invest in

Getting the most out of your franchise investment demands hard work, dedication, and strong business skills. However, it also requires that you understand the franchise system and how to operate within it. Here, we look at ten ways you can work the system to your advantage and make the most of your investment.

Choosing the right franchise to invest in

1. Select a franchise that matches your abilities

When it comes to choosing between franchises, it's essential that you make a decision based on how well youll perform in the role. While passion for your work is incredibly important, it wont make a blind bit of difference if you dont have the necessary skills to supplement it. Understanding your strengths and weaknesses and selecting a franchise based on how well they complement the position is the best way to go. The best franchise business opportunity is the one in which your natural skills and abilities are vital to its success.

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2. Do your research

Before you make any franchise investment, you need to carry out thorough research into the franchise, its competitors, and the industry. Jumping into an investment having carried out little or no research is a recipe for disaster and certainly wont help you maximise profit. In the course of carrying out this type of research, potential franchisees often discover things that they werent aware of and which may impact their chances of success. There may be a previously unknown competitor whos already established a similar product or service in the market. There may be upcoming government legislation that will impact on the franchises ability to operate. There may be a better investment opportunity just around the corner.

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3. Be inventive with your marketing

When it comes to trying to get the most from your investment, you need to get creative with your marketing. This doesnt mean creating surreal or crazy adverts in an attempt to garner attention. It means thinking outside of the box and working hard to make connections that could bring your business additional exposure. For instance, appearing on a radio talk show may allow you to demonstrate your expertise and raise awareness of the franchise. A carefully planned community outreach programme could do some good in your local community and bring in new customers. Dont limit yourself to traditional forms of marketing, especially when theres plenty of cheap alternatives out there.

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4. Carry out thorough due diligence

The due diligence process is the moment that you step back from all the excitement and emotion of a new business venture and carefully consider whether youre making a rational investment. Its a stage that many franchisees rush past and then usually regret not paying more attention to. However, it can be a complicated process and does require some expertise. If you'd like to know more about how due diligence works and why it's essential, you can access our comprehensive guide to the process here.

5. Build a team of trusted advisors

To make intelligent, informed decisions, you typically need input from many different perspectives. That's why it's necessary to organise a team of trusted advisors around you that are willing to offer their honest opinion and disagree with you if that's what they believe. Two of the critical positions in this team will be your financial and legal advisors. On top of this, you'll have your franchise management team and those friends, family and colleagues that can offer advice and guidance. You don't always have to listen to them, but it's healthy to have different voices around you, particularly when problem-solving.

6. Get your finances sorted

When youre first starting out, structuring your finances in the right way can be extremely challenging. Youll need to decide on how much youre going to take out of the franchise as a salary and how much is going to go back into the business to fund growth and expansion. Finding the right balance between the two is essential if youre going to make the most of your investment.

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7. Prepare for expansion

One of the best ways you can make the most of your investment is by preparing for franchise expansion. By adding new units to your existing franchise portfolio, you can multiply your profits without worrying about learning the ropes each time. If youve done it once, all you need to do is replicate the secret recipe. Taking on new franchise units also allows you to make use of economies of scale, pushing down franchise costs and increasing your profit margin.

8. Dont go all or nothing

When faced with a situation in which you feel you have to commit everything to make the business work, think very carefully about your next steps. Going all or nothing doesn't usually result in a good outcome, and if you hold a little back, you can always make another go of it.

9. Work within the system

The franchise model is not particularly flexible. It demands that franchisees work within a strict set of conditions, all of which are typically dictated by the franchisor. However, this is the way the system operates, and if you're always fighting against it, you won't maximise the return on your investment. Instead, you'll devote precious resources to locking horns with the franchisor a fight you'll almost definitely lose.

10. Know what your end goal is

Finally, to make the most of your investment, you have to know what you want from it. Are you hoping to slowly build a franchise empire over a couple of decades? Would you prefer to grow your business and quickly sell it on at a profit? Do you want to gain experience in the franchise system so that you can one day start your own franchise? By understanding what it is you want from your experience, you'll know what reward to chase, and how to pursue it.


While there's no guaranteed path to franchise success, there are ways you can maximise the returns on your investment. The ten tips listed above are just a few of the ways you can ensure you get what you want from your franchise experience.

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