B.rain gives key factors for success that all franchisees should know and implement, in order to build and grow a compliant and profitable business.
Franchises are often (mistakenly) perceived as companies that are well-established and would offer support for entrepreneurs who wish to start their own business, but are wary because of their own inexperience. While good franchisors may offer mentoring and training sessions on the brand and systems a franchise does not teach franchisees how to run a business. Without some basic business skills, novice business owners are bound to struggle. Investing in getting a formal education to understand the details of operating a business is instrumental for franchisees to compete in a complex and ever-changing business environment.
Franchisors provide prospective new franchisees with significant amounts of information about the investment. It is essential, from the onset, to understand the contract, supporting documentation and to clarify any further enquiries before signing. Additionally, do your own research to get a real-time snapshot of the business. View the proposed location and measure foot traffic, peak times and competitors before committing to the investment. Having professional legal and accounting advice is strongly recommended throughout the franchise journey, particularly for signing an agreement, finding out what your financial position is and making the first 24 months projection. Many young businesses are doomed to fail because people do not have sufficient, sound guidance on what their cash flows are going to be until they establish themselves. While many only account for the initial costs, they don’t consider what life will be like without any real income until the business gets off the ground.
The fee structure of a franchise network can be a deal breaker in determining whether a franchise can be run profitably. The type of structure also helps to determine how involved the network is likely to be with the success of their franchisees. Franchise fees structures based on a fixed percentage of your profits indicates that the network is likely to be more committed to your success and confident of getting more money out of its successful franchisees. Conversely, franchisors that just charge a flat rate, regardless of how well or poorly the business does raise a pertinent question on whether the network has franchisees’ best interests at heart.
Please feel free to call us, should you wish to discuss selling our business. Jackie Steinschaden of b.rain is more than happy to answer any questions you may have.