THE 5 STEPS TO FRANCHISE SUCCESS
Earlier this year, I decided to teach a college course on Venture Development and Entrepreneurship. One of the things a colleague said that stood out to me was that “she has never failed a student but the students have failed themselves.”
The same is true for entrepreneurs — we can definitely fail ourselves when investing in a business by choosing the wrong business model.
So, in order to guarantee franchise success, there are 5 steps you need to take.
- RESEARCH, RESEARCH, RESEARCH.
The first thing you should do is look at past failures and mistakes in the franchise industry.
To give you an example, Quiznos is a franchise that ended up failing due to a poor business model. In the beginning, they managed to grow their franchise to over 4700 locations.
However, this number dropped all the way down to 400 after 10 years because of irreparable mistakes the franchise made. Although they were initially successful, tough competitors, a devastating recession, and a leveraged buyout ultimately led to their failure.
I am a strong believer in the quote, “Success leaves clues, but so does failure.”
Use the failures of past franchises to your advantage and learn from their mistakes.
- REACH OUT TO FRANCHISEES
After doing some research, the next thing you should do is reach out to franchisees in the industry you are interested in pursuing.
Successful franchisees are beneficial to talk to because they understand the ins and outs of owning a franchise. You can use their advice and experience to guide you on your franchising journey.
Also try to talk to franchise owners who have failed, because they will give you the opportunity to see what they did wrong and implement a system to improve upon what they built off of.
- SECURE YOUR FUNDING
Another reason that franchises fail is because of financing. This can happen with spending too much cash too fast or just in general the lack of funding. You have to come up with a plan of action and find problems that are fixable.
Once you apply and realize that most of your problems are fixable you are in good hands and you are on the path to franchise success.
You must also realize that you need a long runway of cash to guarantee franchise success. When you have access to a good amount of cash that means you can take more risk and be able to withstand financial losses than another franchisee that does not have the same access to the same amount of funding.
- BUILD STRONG RELATIONSHIPS
Another way you can guarantee your success in franchising is by hiring the right counsel. In order to prepare for meeting with franchisors, you’ll need a knowledgeable franchise consultant to talk to franchisors on your behalf and a strong lawyer to interpret the Franchise Disclosure Document. Having a team you trust is crucial in the franchising process.
Having a good relationship with your franchisor is also very important because they are the ones who will help you when you’re first getting started. They already have profit strategies and systems in place for their franchise so it is best to learn as much as you can from them in order to guarantee your success.
If you choose to have a distant relationship with your franchisor, they won’t prioritize you or your interests, which is only setting you up for failure.
Many people might think this step isn’t necessary, but I strongly believe that when the flow of information is increased, you are more likely to be successful.
- HIRE A FRANCHISE CONSULTANT
Finally, I highly recommend hiring a franchise consultant if you have no franchising experience. Franchise consultants have seen it all in the franchise industry. Using their decades of experience and knowledge will give you the best chance at being successful.
At Bailey Brown The Franchise Agency, we will provide tremendous value to you through giving you unlimited guidance and support along your franchising journey.
We take care of everything — from matching you to a franchise that suits your needs to talking to franchisors on your behalf.
We promise we can take you from employee to entrepreneur, all you need to do is trust us.
In conclusion, these are the 5 steps that you need to guarantee you success in the franchise industry. If you follow them closely, you’ll be able to leave your 9-5 and gain financial freedom through franchising.
Are you ready to take control of your life and become an entrepreneur?