How to make the transition from employee to franchisee
If you’re an employee that’s dreaming of one day reaching the heady heights of franchise ownership, you’ll be happy to hear that your goal has been realised many times before. It’s not rare for employees to become franchisees and they often make particularly good managers. Here, we take a look at five reasons why this is the case, then offer advice on how to transition from employee to franchisee.
Five reasons why employees make good franchisees
1. First-hand experience
There is no better learning environment than being on the front lines and experiencing everything first hand. As an employee, you get to see day to day operations from a drastically different perspective than the management team. You’ll interact with every type of individual – from managers to customers – on a regular basis. You’ll perform tasks that some franchisees won’t know exist and your on-the-job education will be more thorough than the vast majority of franchisees.
2. An understanding of the business model
As an employee, you’re the point of contact for customers, suppliers, and business partners. You see what sells and what doesn't, when the business gets busy, and when it's dead. You'll develop greater insight into the business' target market by talking with customers and watching how they behave and what they purchase. In some cases, franchise companies severely lack this client understanding. An over-reliance on the franchise business model can result in some organisations taking a back seat and not performing adequate customer research. As a frontline employee, you'll naturally develop a more complex understanding of who your market is.
3. Knowledge of the organisational structure
While you may think that it’s easier to get an overview of a franchise’s organisational structure from the lofty position of franchisee, there’s something to be said for the slightly different perspective you get when you rise through the ranks. From the franchisee’s vantage point, you get a complete, but un-detailed, picture of the company hierarchy. From the perspective of the employee, you may not develop a particularly thorough understanding of the upper echelons of the franchise, but your insight into the lower reaches of the organisation is much more useful. You'll have understanding and experience of how different roles interact, what power dynamics are at play and be able to identify those places where things don’t quite work as they should.
In the modern business environment, compassion is one of the most under-valued qualities a manager can possess. There is a type of corporate philosophy that argues that business is business, leave the niceties at home, we’re here to make money. This ‘strongman’ approach to business can have a hugely detrimental effect on team morale, your ability to trust employees, and their willingness to go the extra mile for you. While a compassionless approach may work for those on Wall Street, in the vast majority of contexts it will only damage your business. As a franchisee that was once an employee, you’ll have been through the same experiences as your employees and should have a great deal more compassion for them as individuals. This can improve your managerial skills and ensure you’re ready to build a close-knit team when you find a franchise.
5. Awareness of inefficiencies
Finally, employees make good franchisees because they have first-hand experience with the inefficiencies found in most business. They know what processes and procedures are efficient and which achieve almost nothing at all. They know where time is lost and where it is gained, which orders and policies passed down from on high are implementable and which ignore the realities of everyday operations. Essentially, employees are more grounded in the day to day running of a business than the owners are. That’s not to say that employees are always right, just that they have more direct experience of specific everyday business issues.
Five steps for employees trying to become franchisees
1. Learn about every aspect of the business
On your way to becoming a franchisee, you have the opportunity to learn a great deal about the business and experience the many different parts that constitute the whole. Whether it’s customer service, supply chain logistics, or Human Resources, this is your chance to get a feel for as many different roles and responsibilities within the franchise as possible. It doesn’t matter what your specialism is, successful franchise management is about understanding every process and managing the entire business.
2. Start saving
If you’re seriously considering becoming a franchisee, you need to start saving now. Top franchises don't come cheap, and nearly all businesses will require you to invest a little of your hard-earned cash.
3. Look for collaborators
Franchises aren't run by a single individual. It takes a team to keep things operating smoothly. Consequently, you'll need to build a strong and talented team around you if you're to grow and expand your business quickly. One of the essential qualities of any successful businessperson is their ability to surround themselves with intelligent minds. Don't think you can do it alone and start building your team as soon as possible.
4. Ask for guidance
If you’re working under a good franchisee that you feel you can communicate with, go and ask them for advice and guidance. Some franchisees will have worked their way up from being an employee, others will have taken a different route, but everyone will be able to give you a little support and help you along the road.
5. Create a timetable
Finally, it's necessary to create a timetable for your franchise acquisition based on actionable steps. This means planning your path ahead, establishing goals and objectives to fulfil along the way, and thinking about how you're going to achieve them. This will focus your efforts and give you something to aim for.
Employees often make fantastic franchisees. However, it’s important to make sure you take advantage of every learning opportunity and utilise the unique perspective that being an employee offers. A great deal of hard work, dedication, and perseverance are necessary to succeed, but becoming a franchisee is certainly achievable.
The Editorial Team, Point Franchise ©
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