There are numerous benefits to franchise ownership that make it appealing to many of today’s entrepreneurs. For example, franchise businesses have outperformed the general economy in growth and stability over the last 10 years. Franchise ownership also brings you immediate brand recognition that lets you tap into a preexisting, loyal, and often large customer base. Additionally, franchising connects you to the franchise support network, which includes help with start-up, advertising, and employee training.
But it would be naïve to believe that franchise ownership is free of potential pitfalls and problems or that there will be no obstacles along the road to becoming an established franchisee.
Five of the biggest challenges every potential franchisee will face at some point in his or her new career are as follows:
Franchise Ownership Obstacles
1. Getting Financially Prepared
Franchise ownership is a major undertaking that requires a substantial investment, often in the range of hundreds of thousands of dollars. You will need to pay the franchise fee, acquire the property, and buy all necessary operating equipment—and you cannot be underfunded. The good news is that banks are more willing to approve business loans for franchises than for new start-ups, and the overall costs of purchasing a franchise typically are less than those of starting your own business from scratch.
2. Selecting a Franchise
A big part of doing well in franchising stems from finding a franchise that is widely popular, growing consistently, and whose vision you share. Marble Slab Creamery, for example, dominates in the high-end ice cream sector. Marble Slab ice cream and ice cream cakes are made from all-natural ingredients, and 100% of the milk and cream is sourced from local dairies. This fits well with the recent push for healthier, additive-free snack foods, and many franchisees wholeheartedly share Marble Slab’s vision.
3. Finding the Right Location
Often, franchises will give guidance to potential franchisees in the site selection process within the bounds of what the franchise will accept, but the decision ultimately rests with the franchisee. This responsibility can be beneficial if used wisely. You could set up your unit in your home town or somewhere you are comfortable with commuting to and from daily. Ensuring that the area has a sufficiently large customer base, that your building is easy to access both by vehicle and on foot, and that your rent is low enough for you to thrive financially are some of the main considerations.
4. Acquiring the Necessary Training
You don’t necessarily need experience specific to your franchise of choice before you get started, but to run your unit effectively, you will need to undergo a training process to orient you to the franchise’s established policies and business model. Some business/managerial background helps, but a willingness to learn and follow the franchise’s expectations of how its brand’s products/services will be presented to the public is essential.
5. Hiring and Training Employees
As mentioned above, the franchise will give assistance in training employees, but it is up to you to see that it is done correctly. Furthermore, you or the managers working under you are responsible for selecting applicants who are likely to be good workers and long-term employees.
In conclusion, we can say that as a franchisee, you need a fully thought-out business plan from the beginning that encompasses finances, location, franchise selection, personal training, training of employees, and more. Visit our website to find out more today!