There are several ways to own a business, and one very successful model that anyone can use is franchising. So as a franchise owner, you have to understand that success lies in your hands, because to whom much is given, much is expected.
Succeeding as a franchise owner is non-negotiable because you have been given a template that is more or less a springboard to your big break. As a franchise owner, you have an already established business structure, with less risk of failure. So, succeeding has a lot to do with crossing the “T’s” and dotting the “I’s” – apparently, paying attention to tiny details.
See Also: The difference between franchising and entrepreneurship.
Having a successful career as a franchise owner doesn’t also come easy, it is not a walk in the park. Also, building from the scratch without a template can be the most frustrating route; figuring and debugging every obstacle can build tough skins but doesn’t guarantee a successful entrepreneurial career.
As a franchise owner, you have to be conversant with some things before owning a franchise. More so, a lot more work still has to be done after owning the franchise, in order to become successful.
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1.) Skills and Personality Always Trumps Passion
When it has to do with the franchise, ignore the conventional wisdom of putting passion first. A successful franchise owner focuses more on his skills and personality traits than passion.
Franchising isn’t emotional; you have been given a template and the least that is expected of you is to succeed. Ask yourself these questions: What am I skilled at? Refine it in tandem with your franchise brand and make sure it resonates with the brand. Then, build a system around it, for scalability.
This does not mean that you should build a business or franchise around every skill you have. For instance, you might be passionate about sports, it doesn’t mean that you have to open a franchise outlet that sells sports equipment.
One of the best approaches to things like this is carrying out a self-evaluation test. Appraise yourself – best skills and personality traits, then look for a business and industry where those skills and traits would be a massive asset.
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2.) Play By The Rules
I know you want to explore and be creative in your mode of operation, however, this is not the time for that. You have to play by the rules and play to the gallery.
Franchise ownership comes with baggage – a template of an already established set of practices and procedures. The term “play by the rules” is easier said than done. However, sticking with this policy is what separates the wheat from the chaff. You have to study the system that comes with your franchise and make sure you understand it to the latter. Remember, the franchise world isn’t always the best place for rebellious, self-opinionated individuals.
Play by the rules and avoid the temptation of short-circuiting or inventing your own method of operations – there’s generally a tried-and-tested model. Stubborn franchise owners hardly succeed, because one of the bedrocks of franchises is systems and structures which is anchored on this principle. If you want to experiment, try entrepreneurship!
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3.) Value Your Employees
Even if you’re the most versatile and efficient jack of all trade, you’ll still need a team. You need a phenomenal team as you cannot achieve your goals and visions alone.
As a franchise owner in any industry, you need the right team; they’re the fabric of your franchise business and hence, should be treated with the utmost value. The best franchise owners are necessarily not the ones with the best product or service, but the ones with the best teams. They value and cherish their employees.
Prioritize your employee’s satisfaction by treating them in the best way possible. More so, the way you treat your staff has a ripple effect on your customers. Great employee experience, equals great customer experience.
4.) Network Like A Casanova
One thing about networking is that there is seldom a bad time to network, gain insights, and increase your customer base. Networking is not a game, it’s a continuum, and never should that aspect of your franchise business read game-over.
You already have a template, sometimes, you don’t even need to work so much on your brand identity, all you just need to do is to spread your tentacles across the board. Breaking frontiers in a franchise business is less of brand identity and more networking ability. So, meet new clients and expand your market reach.
5.) Sales And Marketing
No business model works well without a proper sales and marketing plan to achieve set goals. This is the core of any business, whether it is built organically or through a franchise.
Yes, you’ve been given a template, and an already established system and structure, however, you have to generate leads yourself. This is in tandem with networking. Follow your franchisor’s marketing plans
Hunt for new prospects, and expand your market reach. Go for the catch and make sure you build loyal customers that you can further up-sell. To achieve success in your franchising business, you have to keep growing sales and generating revenue.
6.) Conceal Your Franchise Model
Not every Tom, Dick, and Harry should know that your brand is a franchise. Don’t let your customers know either, except your franchise policy states otherwise. Customers have a reservation when they know they are buying from a franchise.
They have this preconceived and subconscious mindset that it is a third party experience and this tends to affect the relationship between them and the brand. Hence, their loyalty sometimes becomes questioned.
7.) Franchisor/Franchisee Relationship
As a franchise owner, you don’t want to be in the bad books of your support system. No matter how big you’ve grown your franchise business, make sure you build a mutually beneficial relationship with your franchisor.
However, this doesn’t mean you should be a puppet, it just means that your trust reservoir shouldn’t be empty because trust isn’t a renewable resource.
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8.) Know Your Numbers and Track Everything
Numbers give you facts and separate emotions from realities. They keep you in check when building your franchise business. As a franchise owner you need to know your unit economics:
Operating cash flow offers a bird’s-eye view of the economic state of your business. You can get this by subtracting your operating expenses from the money your company generates during normal business activities.
It is similar to your cash flow. Your net income (net earnings or net profit), is gotten after subtracting all your expenses, including taxes, from your income.
Profit And Loss
We call it the P&L statement, which is more or less the statement of your company’s income (sales and revenue) minus expenses during a specific period of time. It is generated quarterly, biannually, or yearly.
Sales is the bedrock of all numbers. This figure is non-negotiable on the number’s list. Franchise owners need to pay attention to this number.
Entrepreneurs and franchise owners should know exactly how much it will cost them to purchase their goods. Also, they need to know what they’ll need to sell those goods or services in order to make a profit.
See Also: Factors to consider when pricing your product or services.
Also known as your gross profit and related to the price point, this figure reflects how much money remains after the actual cost of your merchandise is subtracted from the selling price.
As a franchise owner, you need to monitor your inventory numbers on a weekly basis. This ensures that the amount of inventory isn’t gradually increasing, as this could be a sign of sales trouble.
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One of the benefits associated with very good and strategic geographical positioning is that the location will do most of the talking. Occupying primary location sites for franchise stores is very germane, especially for franchise businesses in the hospitality and restaurant industry.
In fact, if you have the opportunity to pick the best location, then a certain percentage of your marketing and advertising has already been covered as a franchise owner. This further explains both the hefty operating margins and the high return on assets.
10.) Economies Of Scale
As a franchise owner, economies of scale are one of the most beautiful things that can happen to your franchise business. This business concept drives down your cost of production, due to a large amount of output.
Economies of scale will give you dominance in your industry and you can have a monopoly which helps in driving the competition down. The more business you do, the more you can take advantage of learning curves and economies of scale.
See Also: 100 Profitable business ideas to start now for aspiring entrepreneurs and investors.
No matter what kind of franchise you buy, be it wildly popular or relatively unknown, it’s ultimately your own abilities and attributes that will impact its fortunes the most.
As a franchise owner or one who plans to buy a franchise, which of the attributes resonates with you? Let us know in the comment section below.
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