If you have analyzed all approaches to starting a business, and there’s only one that has come out on top, such as franchising, then this is a smart move.
There are plenty of reasons why you may have chosen to be a franchisee. You can benefit from the reputation and popularity of a well-known brand. There’s a system in place that is proven to generate profits. You will receive training and ongoing support from the franchisor.
The list goes on and on.
However, there are various pitfalls that can scupper your plans. To help guide you away from these, here are five mistakes to avoid when becoming a franchisee.
Picking the wrong franchise
Now, what can be deemed as a ‘wrong’ franchise? Well, you may have identified franchise options that are lucrative, the type that will deliver a sure-fire profit. Nevertheless, while making money is important, it shouldn’t be the only focus.
Ultimately, you need to select a franchise that is of interest. If it’s a subject matter you’re passionate about, you will have that added determination to make the venture a successful one.
Underestimating how much it costs
It’s easy to underestimate your expenses and overall cost of starting a franchise business.
For instance, a franchisor might detail the price of the actual franchise fee – but neglect to include a breakdown of the total cost. As a result, always request a comprehensive analysis of what’s included with the franchise fee. Then it’s a case of filling the gaps by identifying all other potential expenses.
Once you have an accurate figure of the costs, you can then begin to look at the best franchise loans available so that you can pay for it.
Not putting in the research
Any type of business requires an extensive amount of research. This is the case with a franchise.
You might not think this, however. A franchisor may supply you with an extensive amount of information – the type you feel answers all relevant questions. Yet it’s essential you never take any claims at face value. You can verify the validity of these claims with a quick Google search, or by seeing what other franchisees have to say about your brand of choice.
Don’t expect complete control
If you dream of running a business where you have complete autonomy, forget about running a franchise.
Depending on how you look at it, this is one of the negatives of this business type. You have to be strict in adhering to the instructions set out by the franchise model. A franchisor isn’t going to allow you to start changing prices or altering the product range. In essence, you need to do as you’re told.
Taking on too much at once
When you start a franchise, you likely have visions of owning several outlets at some point. Yet it’s important you don’t try and do too much at once. Start slow, take on a single franchise, and see if you can turn it into a success.
Not only will this stop you from becoming overwhelmed, but it also permits you to learn the ropes before expanding into other areas.