Have you got what it takes to be a retail franchisee?

01/06/2018 17:00 | Start a business

Become a retail franchisee

Becoming a retail franchisee is a long and arduous process, that's ultimately very rewarding. However, to make a success of it, franchisees need to be 100% certain that they know what they're signing up for. That means knowing whether youre prepared enough to take on the responsibilities of being a franchisee, or whether youre not quite ready. Here, we provide you with an eight-point checklist that should help you work out whether you have what it takes to make it as a retail franchisee.

Become a retail franchisee

1. Are you willing to put in the hours?
A retail franchise requires you to put in an incredible number of hours, particularly when youre starting out. Its not uncommon for retail franchisees to put in 70 hours a week to get their business off the ground. While your weekly hours will reduce once the franchise is established, and you're sure there's a good team running things, that first couple of years demand perseverance, courage, and an ability to keep going, even when you're running on empty. If all that hard work puts you off the idea of franchising, maybe youre just not ready for the role of retail franchisee.

2. Do you have a passion for retail?

Perhaps your passion is food and providing individuals, families, and friends with a dining experience they'll always remember. Maybe you have a passion for e-cigarettes and can think of nothing better than starting up your own vaping franchise. It doesnt matter what type of retail franchise youre buying into, youll still need a fiery passion for the industry if youre going to succeed. However, its also important to understand that not every day in your dream franchise is going to be fantastic. Theres likely to be a lot of blood, sweat, and tears before theres the joy of success, so be prepared to ride out the tough times to get to the good ones.

3. Can you take orders?

As a franchisee, you are technically your own boss. However, this doesnt mean that you can do what you want. Most franchises, but particularly famous franchises with a hard-earned reputation to uphold, will want you to follow their operations manual to the letter. Generally, franchising works because it takes a relatively simple business model and provides franchisees with a step-by-step guide of how to replicate it. They don't want franchisees to mess with the secret formula, and they don't want them to demonstrate much independence. In retail, it's often the case that the best franchisee is the one who does what they're told.

4. Can you give orders?
That being said, franchisees also need to be able to give orders. As the business owner and manager, it is your responsibility to ensure that all the staff understand what they're doing, know the rules, and work productively and profitably. You need to be able to manage them, motivate them, and ensure they're maintaining high standards. Most of the time, the only way of doing this is by giving clear and concise orders. If you struggle with telling people what to do or aren't comfortable making those tough decisions when an employee isn't working as they should, a retail franchise may not be for you.

5. Can you build a team that you can trust?
Though youll likely take a hands-on management approach in the early days of your new franchise, youll still need to build a team that you can trust. While franchisees must keep a close eye on how employees are performing, its impossible for them to see and know everything thats going on in-store. Consequently, franchisees need to be able to hire individuals that they can trust to do the right thing. This requires you to be a good judge of character and for you to demonstrate that you can also be trusted to do the right thing by your employees.

6. Do you have the business know-how?
Though the best franchise opportunities are those that provide their franchisees with an incredible amount of training and support, they won't be able to teach you basic common sense. As a franchisee, it's vital that you're able to tap into some essential business expertise and that you're not merely muddling through. Just because you have the backing of an established franchise, doesnt mean the business is going to run itself.

7. Do you understand your financial position?
While you may have the initial investment required to start a retail franchise, that doesnt necessarily mean youre able to afford the franchise itself. Franchises often need a great deal of working capital, and usually, have to survive an initial period in which the business will struggle to break even or not make a profit at all. Consequently, you need to make sure that your finances are in order before you invest. Once you've paid the franchise fee, the royalty fee, and operating costs, are you still able to pay yourself a reasonable wage? Do you have the financial backing to survive a difficult first few months?

8. Are you able to commit?
Finally, if you're considering starting a retail franchise, you need to understand that you're committing to an extended period of collaborative work with your franchisor. While most first-time franchise contracts last around five years, to truly reap the rewards of your business, you may need to commit to 10, 15, or even 20 years of hard work. With this in mind, we recommend that franchisees think long and hard before they sign their franchise agreement.

As with all types of franchise, retail franchises require you to be hard-working, passionate and dedicated. Without these qualities, you'll struggle to make a success of your business. However, retail franchises, in particular, place many unique demands on franchisees. Hopefully, our eight-point list will have given you some idea as to whether you're prepared for the role or not. Remember to do your research, ask questions of your franchisor, and request legal and financial advice, before you make any final decision. If you'd like to learn more, please don't hesitate to get in touch.

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