Number One Hit: How To Succeed As The First Franchisee

11/04/2018 08:00 | Start a business

How to succeed as the first franchisee

The first person to walk on the moon, the first president of America, the first person to climb Mount Everest. The world is full of firsts, and franchising is no different. For every one of the 901 franchise systems operated in the UK today, there had to be a franchisee that was the first. Were these people brave, foolish or savvy? To be honest, they were probably a combination of all three.

Do you have what it takes?

For many reasons, the best franchise opportunities may be available to those willing to be the first franchisee. But it takes a particular type of person. You need to be a risk taker, be able to adapt to unforeseen circumstances and have a truly entrepreneurial mind-set.

Here are the top three secrets to be the first successful franchisee:

1. Understand the importance of being the first

Being the first franchisee is a thrilling concept. You get the chance to be part of a franchise business from the very beginning. If you and the franchisor get this right, you could build a successful and lucrative franchise system for others to follow.

But you shouldn't underestimate how tough being the first may be too. You need to understand that you're being given a unique opportunity and the role you play will be different to that of the franchisees that join at a later date. You're essentially the tester for the franchise, and both you and the franchisor will be learning along the way. This won't always be easy.

You won't have a network of other franchisees to turn to for guidance, and the support that you will get from the franchisor won't be tested and proven on others. On the plus side, youll receive a lot of credit and respect for the part youll play in developing the franchise system.

You need to have the right attitude and have faith in the brand youve invested in. You need to be brave to decide to invest in a franchise without the reassurance that an existing system with several successful franchisees can provide. This increases the risks, but could also offer the best franchise opportunities. Ultimately, you will be a figurehead for future franchisees who will look to follow in your footsteps.

2. Have realistic expectations

Its likely that a pilot franchise will have been run before you got on board. This is the opportunity for the franchisor to prove that the model works when they have been removed from the equation.

It's the results of the pilot which probably encouraged you to take a gamble on the franchise, but don't think that all wrinkles in the franchise system will have been ironed out during the pilot phase. Sure, a pilot is an excellent opportunity to identify any gaps in operational processes and training programmes, but as the first franchisee there will still be a lot of 'test and learn' when the concept is rolled out.

No matter how well the franchise pilot performed, it will be different for you. The pilot franchisee may have been chosen because they understood the business or had experience of being a franchisee before. As a new franchisee to the company, both you and the franchisor are going to learn by making some mistakes.

Good franchises invest in producing a quality training programme and operations manual that franchisees receive, but as the first, the support you get may be hit or miss. You will need to develop a relationship with the franchisor that is built on trust. Having open and honest discussions with the franchisor and their team is vital to the ongoing success of the franchise. If something doesnt work, you need to feel comfortable enough to give constructive feedback.

3. Get your money's worth.

This could be one of the best franchise opportunities ever, but you need to be comfortable with the fact that the franchisor will be using you as a learning tool. While you may be happy with this, the franchisor should reflect this in the franchise fee. As the first franchisee you would expect the franchise fee, and potentially the ongoing fees, to be lower.

The franchisor may insist that as the only franchisee, the support you'll be offered is more substantial than later franchisees will receive. But it should be remembered that elements such as the training and operation manuals will not be as well developed as they will be further down the line and so this should also be factored into the franchise fee. Good franchises will understand that the financial considerations need to be negotiated so that both you and the franchisor feel that youre getting a fair deal.

Your help in establishing the franchise fees for future franchisees will be vital to the success and longevity of the business. Based on your experiences, you should assist the franchisor to get the right balance. If they set the fees too high, recruiting new franchisees may be difficult. But if they set the fees too low, they will generate insufficient revenue leaving them unable to provide adequate support to franchisees.

As youve been on board from the very beginning, its in your best interests to support the franchisor to develop a fee structure to encourage more franchisees to join. Good franchises charge financially justifiable rates to enable both franchisees and the franchisor to achieve profitability. This means that the franchise that you helped to shape will continue to grow; putting you in a strong position.

So, if you're thinking about becoming the first franchisee, you should weigh up the pros and cons that come with this extraordinary opportunity. It takes a specific type of person to take on the responsibilities of being the tester for a franchise concept, but if you think you've got what it takes to take the risks and reap the rewards, this could be an exciting journey into franchising.

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