Trust and passion are critical to success
The world of franchising is huge. People who are looking to start their own business can choose from a myriad of business models in nearly 100 industries — everything from tax preparation to shipping to home health care to restaurants or hotels. How do you gauge which franchise is best for you?
Success is determined by your ability to find a franchise that fits your passions and experience, and a franchisor who has plenty of resources and who works hard to grow the brand and assist franchisees as they build their business.
Picking the right concept
Everyone wants a job they truly love, and one of the best things about starting your own business is the freedom it gives you to concentrate your work life on something you find rewarding. It’s important to be passionate, because owning a business can be stressful and challenging at times, and a passion for your work and commitment to your dreams is essential to overcome hurdles.
Successful franchisees must also be comfortable with long-term commitments, have business skills and cash reserves to tap into while their business gets up to speed, and be willing to make sacrifices to improve their lives, their family, the lives of their employees and their community.
Depending on the business, a franchise owner may also need to have great social skills, knowledge of specific software, be highly proficient with math, or know how to repair a car or style hair.
The best franchise concept will not only fit your passions and skills, it will also be in a growing market with broad-based appeal. The more customers you can reach, the greater your success will be.
Picking the right leaders
Franchising is a strong partnership between franchisee and franchisor. Franchisors set policies and standards for the brand, determine what the brand will provide customers and make decisions about marketing. They set the direction for the brand. The reason franchising attracts so many entrepreneurs is because they know they will benefit from joining a business system that has proven itself in the marketplace. At the same time, franchisees sometimes wish they had more control over their individual stores. An undeniable fact about the franchisor-franchisee relationship is that franchisors retain a fair amount of control.
A good franchisor will listen carefully to franchisees and build relationships based on trust and mutual respect. As you investigate a franchise, you should speak to franchisees within the system and ask about their relationship with the franchisor. Franchise agreements typically last 10 years or more, so this is the closest thing there is to a marriage in the business world. You’ll want to have a partner who pays attention not only to growing the number of franchise locations, but continuously improving unit economics.
As you investigate a franchisor, key questions include: What experience does the franchisor have? How will I be trained, and by whom? Who are my suppliers, support staff, employees and customers? How will the company support the development of my business? How are my franchise fee and royalty payments used?
Pay close attention to the people running the franchise — they can help or cripple your chances of success.
Tasti D-Lite and Planet Smoothie chairman and CEO Jim Amos has more than 30 years of experience guiding successful franchise companies such as Mail Boxes Etc. He was inducted into the International Franchise Association’s Hall of Fame in February and is co-author of the newly-released book The Tasti D-Lite Way: Social Media Marketing Lessons for Building Loyalty and a Brand Customers Crave (McGraw-Hill).