Franchising gives investors the chance to set up a profitable business with a proven model, but the system involves a bit of preparation. We’ve rounded up some of the most important lessons franchisees have learnt after signing their franchise agreement, to help you get ready for investment.
The franchise industry is full of people who have transformed their life by investing their money wisely. Many have gone from facing redundancy to leading a successful business in a matter of months.
It can be daunting to jump into franchising, which is why it’s so important to share real-life franchisee stories and advice from people who have already made the leap. If you’re thinking about becoming an investor or are about to sign a franchise agreement, take a look at these five insights from successful entrepreneurs.
What to know before signing a franchise agreement
Here are some of the most important lessons learnt by existing franchisees.
1. Trust in the formula
Franchising is all about following a set formula to replicate successful businesses. If you don’t use the company’s pre-established strategies, you’re unlikely to see success - and you may even damage the reputation of the entire network.
As a franchisee, you must be ready to leave your ego at the door and avoid trying to put your own stamp on your business.
“Don’t try to reinvent the wheel. What you pay for when you join a franchise is a successful formula, so why try to change that? There will be bumps in the road… But the important thing is to ask for help and keep things simple.
“You’ve got to have real trust and belief in what you’re doing, and when the tide turns and the money starts coming back in..., that’s when you know you’ve done the right thing.”
- Paul and Carol Watson, Platinum Property Partners franchisees
2. Be ready to put in the effort
The franchise industry can offer a shortcut to business ownership and provide immediate security for investors, but you still have to work hard to make your unit successful. As with any business venture, building up a franchise unit involves dedication, commitment and a certain amount of passion, so you must give it your all from the get-go.
“A franchise is a ready-made business, but it will only be as good as you are.”
- Greg Towers, Business Partnership franchisee
“To be successful in franchising, you have to be determined and have a strong business plan. You have to constantly market your business, whether that’s through local adverts, leafleting or social media. In my experience, if one form of local marketing isn’t generating leads, don’t be afraid to try something new. But it is all worth it to see the satisfaction on my customer’s faces.”
- Nigel Colson, Ovenclean franchisee
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3. Research well to avoid making mistakes
There are thousands of franchise brands out there, and dedicating a significant amount of time to research will help you identify the most suitable option for you. You’ll need to consider a range of different factors, from investment cost and franchisee criteria to revenue potential and territory availability.
Never rush the due diligence process; conducting thorough research will help you make sure you end up in the right franchise.
“Ensure you research the opportunity thoroughly and make sure it is the right fit for you… Be sure that it’s because you want to further develop your passion… and don’t be afraid to ask questions in getting to know about the business and what [the franchisor’s] expectations are.”
- Louise Crabtree, SportsCool franchisee
“My advice to anyone looking to join [a franchise] would be to book onto a Discovery Day. It's so informative, so have a pen and pad ready and write down any questions you may want to ask.”
- Jason Simmons, Really Awesome Coffee franchisee
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4. Networking will help you gain insight
You can read as many franchise brochures as you like, but there’s no better way to gain an insight into a business than to talk to existing franchisees. People who have already invested their money into the franchise will be able to tell you what lies ahead if you take the same path. And, unlike the franchisor, they’ll have no reason to bend the truth.
Networking is also key when you’re looking for customers, so be prepared to put yourself out there and be sociable if you’re considering franchising.
“Speak to as many franchisees as possible, including those who may not be doing so well and those who have given it up. Do your homework and find out what will happen if things don’t go well for you. Find a franchisor who will offer you additional support if you are struggling.”
- Paul Winterbottom, The Alternative Board (TAB) franchisee
“My one piece is advice to anyone considering a franchise would be to network among the business community in your area and make valuable connections – don’t sit at your desk and wait for people to call.”
- Raymond Blin, Business Partnership franchisee
5. Support is crucial
Running your own business as a franchisee can involve a lot of hard work and long days, so having a solid support network in place is important.
Whether you turn to family, friends or even your franchisor during tough times, make sure you have someone who is right behind you as you launch your business. You’ll need people who can offer reassurance and welcome distraction, particularly in the first few months.
“All franchises offer different levels of business support and there is no one-size-fits-all approach. However, it is key to find a franchisor who can offer a support network you can utilise to help you run your business effectively. As a business owner, you must wear many hats – from industry expert, through salesperson, to accountant, marketer and everything in between – and having guidance and experience to draw from can be invaluable.”
- Tim Harris, Managing Director of ChipsAway and Ovenclean
“A strong support network around you is key! Having family and friends, especially in your first year… is really helpful.”
- Pia, The Christmas Decorators franchisee
More information for prospective franchisees
There’s no shortage of information for budding entrepreneurs and franchise partners - here at Point Franchise, we have thousands of data-driven articles and business guides to help investors get started.
View our full catalogue to see our most recent publications or use the search box to find specific guides.
You may be interested in finding out more about the franchise agreement and how you can negotiate the terms when you meet with your future franchisor. Just click on the links to view our guides.
And for more franchisee stories and advice, see our daily news articles covering the latest developments in the franchise industry.
Alice Tuffery, Point Franchise ©