With franchises of well-known corporate giants opening up left, right and center, franchising seems to be a promising business option for most startup entrepreneurs. It is believed that this trend is on the rise, what with more than 100 franchise systems opening up every year.
However, if you thought that the backup of a corporate giant would mean instant success, there is no such thing. Franchises are as likely to fail as any other startup businesses. According to experts, the main reason for these failures is the fact that franchisors and franchisees are too quick about making a deal without weighing the pros and cons.
If experts are to be believed, franchising is not something that you get into at the spur of a moment. You need to analyze and plan a lot of things before you take the plunge. You also need to have a solid financial backup to pay for the franchise and float through the initial years when there might be zero profit.
So, if you are thinking of buying a franchise, make sure you do your homework before committing to anything.
We have few insights into what you need to consider before going the Franchise way.
Knowing the Franchise Facts
Franchising a well-established organization alone in no way guarantees any success for you. Agreed, the name of the company might gain you some crowd for starters. However, in order to keep it afloat you would have to work as hard as you would in case of an independent startup. Before, getting into the franchise rut, make sure you are ready to put in that much needed time and effort.
Adherence to the System
Did you know that all franchises have to follow certain norms and systems that have been formalized by the organization? This is done to ensure consistency within the franchises in terms of products and services offered. When you buy a franchise, you are bound to follow this system. Wanting to bring in your own rules may just not work for a franchise.
As the owner of a franchise, you would need to interact with other franchisees, employees, customers and vendors, day in and day out. Thus, strong inter-personal skills are a must have for a franchise owner. If you think that you are an introvert and find it hard to connect with people, buying a franchise might not be a feasible option for you.
You need to pay a huge amount to the parent company in order to secure a franchise. Other than this, once you buy it, you need to spend some amount on setting up the work space and the likes. You also need some fall back finances for a considerable amount of time, till your franchise picks up pace and starts showing some profit. Analyze your financial standing properly and decide whether you can really afford this investment.
Joy of Franchise
Like all things business, you need to enjoy the fact of owning and running a franchise. Buying one just for the heck of it and then not enjoying it may wreak havoc on your personal, professional and financial lives. With franchise contracts extending for up to 10 years, you need to give this a lot of thought as you definitely can’t afford to be stuck with something that you don’t enjoy for that long a time.
Analyze all the above facets before you make a decision about your franchise dream. Owning a franchise is a great idea. So, if you feel you have it in you, go ahead and get started.
A mother of two, my dream of building a career came true when I identified my gift for writing. A writer by profession and a bookworm by choice, I love reading, watching movies and listening to old hindi music when I am not working.