20 Apr 7 Tips to Get the Most Out of Your Franchise Business
Owning your own business can be very exciting, as well as nerve-wracking! As former franchise owners and experts in the franchise development process, we have compiled our own list of tips, which we have found to be critical for the success of franchise owners. These 7 tips will ensure you get the most out of your franchise business:
- Make sure that you are passionate about your business: Earlier in my career I would often say “McDonald’s isn’t my favorite fast food, but I would love to own 10 of them.” As I have matured in the business, I have changed my position. I have met many of the top franchisees in their respective brands and they will all tell you that there has to be a deep emotional attachment and belief in their concept in order to maximize the opportunity. In other words, “if you won’t eat it, don’t own it!”
- Have realistic expectations. Franchising can be very profitable if your mindset is properly adjusted. It is a lot of hard work, long hours and being very proactive across the board. Understand that often times the goal the first year is just to break even, or post a modest profit.
- Understand every step of the process in opening your business. Make sure that you are actively involved in these steps and do not be afraid to ask for information, or help along the way. Although a good franchise company shepherds most of these processes and has a pre-opening timeline, anticipating next steps will keep you ahead of the curve.
- Become a student of the category. Whatever category that you decide to make your investment in and ultimately the franchise that you choose, know the category inside and out. Make sure that you take the time to know the competition, know the trends and keep up with the industry news. You will be an expert on the business and that knowledge will help you in your daily operations.
- Hire the best. Hiring can be a very tricky proposition, market conditions can vary greatly, so understanding your local HR environment is extremely important. To find good management you may need to interview up to 20 candidates. Hiring the right management is as equally as important as finding the right location and often makes the difference between success and failure. Do not be afraid to pay a GM a top salary based on their skill set if they are able to make your job as an owner significantly easier or better. Your quality of life is very important, so paying the right GM an extra $5,000 a year in order to comfortably and confidently take that family vacation is an excellent investment. A good GM can staff a store and is usually connected in the market which can help the sales process as well.
- Be a leader in your system. It isn’t easy to always follow the rules. Once you have been open a while you will naturally spot processes, menu items, or other things that could be improved upon. Understanding that there is probably a forum for your thoughts to be shared with the executive staff, do not be “that guy”. The guy who makes the changes without approval in hopes of being able to prove to corporate how much better his way is. Always use the proper channels to communicate ideas. Franchisors love to hear ideas on streamlining processes and improving productivity or customer and franchisee satisfaction. Following these channels puts you into the Valued Partner category and not in the Problem Child column.
- Communicate. Do not ever be afraid to ask for help and clearly communicate opportunities or issues. Encourage your staff to do the same internally. One of the most common problems within franchise systems is the failure of the communication between the company and owners and the local staff to the store owner. I have also seen owners try to work through problems that could have easily been fixed had they just asked for guidance. Conversely, I have seen franchise companies stand by and watch franchisees struggle and have been slow to offer assistance.