While all successful franchisees are different, they usually share many qualities. Whether it’s determination, drive, or an ability to prepare for the challenges ahead adequately, some traits seem to be essential attributes for high-performing franchisees. Here, we take a look at what it takes to be a successful franchisee.
Look at yourself
In all the excitement and emotion of preparing to set up your own franchised business, it’s easy to get carried away and not think about your skills and suitability for the position. Before you make any franchising decision, it's necessary to step back and take a good, hard look at your motivations, desires, and goals.
First of all, do you have the necessary skills and temperament to become a franchisee? The franchisee occupies a strange, halfway-house role – they’re their own boss and manager of a company, but they’re also operating within the confines of a strict franchise system and have to report to the franchisor. This means that franchisees have to be capable of, and comfortable with, both giving and taking orders.
Secondly, franchisees need to demonstrate a passion for their particular product, service, and industry. Without the type of dedication that passion enables, it’s going to be challenging to get through the franchise’s difficult early period. Establishing successful franchises takes an incredible amount of hard work and dedication, and franchisees can expect the business to consume much of their professional and personal life early on.
Finally, are you able to commit to a minimum of five years working in the franchise? Unlike other types of business relationship, franchisees can’t just walk away from their job. There can be drastic consequences for those that do want to leave early, and franchisees need to be sure that they're willing to commit themselves to a long-term partnership.
Do your research
To be a successful franchisee, it’s necessary to do your research and understand what you're getting into. In the early stages, there will be many different factors you need to consider, explore, and research. The first is your chosen industry. For example, if you’re hoping to open a fitness franchise, begin by researching the fitness, health, and wellbeing sector.
What are the market leaders doing at the moment? What distinguishes successful franchises from those falling behind? Is demand growing and the market expanding, or are customers walking away from the sector? What obstacles do businesses trying to make it in the industry face? What direction is the industry heading in and what is its future?
Much of this information can be discovered in trade publications, by talking to those already operating in the industry, and in financial reports. Your research needs to be extensive and cover all the bases. Otherwise, you're likely to miss a piece of information that could be key to making the right decision. Without this research, you won’t be making an informed choice and will struggle to impress franchisors when it comes time to meet them.
It’s also necessary to research franchises. This is much easier once you’ve conducted your market research, as you’ll know exactly what you’re looking for, understand what franchises need to do to succeed, and have a good idea of what to avoid. When you’re researching franchises, make sure you utilise every resource at your disposal. Don’t rely on a single source and don’t be afraid to ask questions.
Talk to franchisees
If you’re to develop a well rounded and comprehensive understanding of how a particular franchise operates, it’s necessary to look at the organisation from multiple perspectives. Once you’ve spoken to the franchisor, make sure you contact as many existing franchisees as possible. Any honest franchisor will be happy to provide you with a contact sheet for their franchisees. Only if they’ve got something to hide, will they refuse your request, provide you with a cherry-picked, redacted list, or put you in touch with a single, ‘cheerleader’ franchisee.
Most franchisees will give you an accurate account of what you can expect from the franchisor/franchisee relationship. Occasionally, you’ll encounter a franchisee that is particularly bitter about their experience, or that thinks their franchisor is the best thing since sliced bread. While you should hear what these franchisors have to say, it’s important to recognise that they’re most likely outliers and not representative of the average franchisee experience.
Get your finances in order
Finally, a successful franchisee will also ensure that their finances are fully accounted for and that they’ve completed a comprehensive budgeting process. While franchises often talk in terms of the minimum level of investment required, they rarely advertise the total cost of investment. This is the figure you’ll need to take into account when budgeting.
You’ll also need to begin thinking about financing options. There are both traditional and alternative lenders to consider, as well as how much you’ll need to raise in cash, and whether you’ll be dealing in debt or equity. The answers to these questions will depend on your particular circumstances.
The principal way that you demonstrate that you’re financially prepared to run a franchise is the franchise business plan. This is the document that you present to potential lenders when applying for finance. Essentially, this is the text that will convince lenders that you are a safe and sensible investment. In it, you need to demonstrate that you have a firm grasp of all the issues that we've mentioned above. The Franchise Financial Disclosure (FDD) document offers an insight into how this should be presented, or you can access our full guide here.
Conclusion
One of the most critical traits found in all success franchisees is their ability to research and prepare themselves for the challenges ahead. When you're considering becoming a franchisee, there's an incredible amount to think about. These early stages require excellent organisational skills and the determination to be as prepared as possible. Extensive research, a certain amount of introspection, and an ability to put in the groundwork are the foundations on which a successful franchisee is built.
The Editorial Team, Point Franchise ©
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