31 May 8 Things to Keep In View Before Becoming a Franchisee
If you want to be your own boss, the one way to do that is to invest in a franchise business. While you will find a significant amount of information on franchising online, you will need to actually know a number of things, before you take the dive, so to speak. These are the different aspects you would have to keep in view before you become a franchisee:
#1 The model
Franchising is an excellent option for anyone that wants to own a business, but hasn’t been able to start one on their own. This concept is a very simple and effective one. Some person comes up with a certain product/service idea and starts a business venture.
Some businesses such as pizza outlets are easy to replicate; however the person that started the business doesn’t want to invest a large amount of money in expansion. That is when the question of franchising comes into the picture. The franchisees invest money and help grow the original business under the original brand name.
#2 Risk tolerance
Regardless of what business you are investing in, there is an element of risk involved and there isn’t any way to mitigate the risk 100%; however, there are a number of ways in which you can lower it. It’s important that you thoroughly think this through. You also need to have the capital to dip your fingers into the franchising pot and understand whether you are ready to handle that risk.
#3 Familiarise yourself with the rules
The thing you have to keep in mind is that as a franchisee, you should be willing and able to commit to the rules that have been set down by the original brand – the rules help the company ensure that the quality of their products or services are consistent across the board.
#4 Understand your personality type
It’s crucial that you do a very objective self-check before you become a franchisee. If you are someone who can’t follow rules and aren’t comfortable with reporting to someone, then franchising might not be the best option for you.
#5 Finances are important
You should check what your net worth is, well before you even begin searching for a franchising opportunity. You should take a clear view of your assets and your liabilities. The difference between these becomes your net worth and the franchisors will require this information before they okay your franchisee proposal.
#6 Action the franchise search the right way
It can be extremely difficult to scour the Internet for the perfect franchise. It’s important that you customise your search, if you want to make this process more effective. Note down your professional skills, traits that define you and other details and then go about looking for a franchise based on those parameters.
#7 Create a business plan
Even before you hurry over to your bank to apply for that small business loan; you are going to need a business plan. The institution that is going to lend you money will want to know your story and understand what your projections are. Look online for business plans software.
#8 Make the right decision
This entire process from start to finish, can take anywhere between 2-3 months to be completed and then you would have to make your final decision about whether you want to be a franchisee or not. If you are determined and have planned everything well, you will be able to make a success of your franchisee venture.
For any more tips or information related to franchising and how to make a success of it, contact us via this number – 1300 855 435. If you like, you can also send us your queries via this online form.
Thanks for reading,
The Franchise Institute Team
1300 855 435