3 steps to find the franchise that fits your needs

3 steps to find the franchise that fits your needs

By SirGerardThe1st | Franchise matters | 21 Oct 2020


For many reasons, more and more people want to leave their current corporate job, because they simply want to feel more and more in control of their destiny and finances.

And of course, in these pandemic times, one of the options is to buy a franchise.

But what franchise to buy? Can anyone buy a franchise?

Franchisors do their job of offering their franchises, and, when a candidate appears, the common thing is that a professional research process is not done before granting the franchise, and, in the eagerness to say that there is a new franchisee in the network, contracts are signed that cannot be fulfilled.

The franchising methodology consists of a triangle that must be covered before entering this fascinating world, which, as I said several times, is not available to everyone, and I am not only referring to the economic aspects of investing.

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Image of Alexas_Fotos in Pixabay 

 

In this sense, you should consider the following three questions:

1- Can you be a franchisee?

2- Can you work with this franchisor?

3- Am I going to make enough money with this franchise?

 

Let's see some comments for each of the three questions separately

 

1- Can you be a franchisee?

It is very true that not everyone can adapt to the franchising methodology, no matter how hard they try and do their best.

On the one hand, the franchisee has to be an entrepreneur, a person willing to face risks. On the other hand, he/she has to agree to receive instruction and do what others tell him/her. This seems like a contradiction. But there are different kinds of entrepreneurs.

Being a franchisee means that you must have the skills involved in running a business, that is, marketing, sales, administration, finance, human resources, strategy. If you don't have them, and you still want to be a franchisee, then you have to find and hire someone who does and who can run the business in which you are investing. This will increase the payroll of your franchise, and the franchise format that the franchisor is selling you may not be prepared to bear this cost.

Whether you or a hired manager runs the franchise, in any case you, the one who signs the franchise contract, will have to have leadership qualities, and there are not many people who are willing to lead teams, who know how to make it, and who strive to find solutions to daily problems a franchise faces in the long way of satisfying and delighting a client, so that he/she keeps coming back, and thus becoming a reference business in the territory.

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Image of Daniela Carvalho Dani in Pixabay 

 

 
2- Can you work with this franchisor?

Many franchisees do not take into account that they will be married to this franchisor for at least 5 years. You must be in love with the brand and the concept when entering a franchise business. But, it is imperative that you do your own due diligence and investigate the franchisor and his way of doing things before embarking on a ship, a ship that you will not be able to change course.

First there has to be "skin", however this is defined. Then comes the logical instance of analysis. For this, there is nothing better than talking to other franchisees. You should talk to several current franchisees and ask them about anything you can think might make you uncomfortable in the long relationship that awaits you.

I'm going to talk about how to talk to operating franchisees before buying a franchise in an upcoming post, so stay tuned.

After all, this is a business, and you don't do business with just anyone, and even less with companies with which you don't share a vision or a lifestyle. For example, if you are an ecologist and teach your children the narrative of conservation of the environment and care of the planet, do not enter a franchise that sells soda in plastic bottles, or does not have a clear policy on what to do with waste.

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Image of beate bachmann in Pixabay 

 

You must feel that you have a daily purpose when opening your store in the morning, and that your franchisor shares the values ​​that make you feel like an idealist who is adding something to your territorial community.

 

 

3- Am I going to make enough money with this franchise?

Here you have to be careful when talking about profitability. Because there are many "professionals" who do not know how to calculate the profitability of a project.

For me, profit means receiving an after-tax sum from the franchise that serves for three things: saving some money, investing some money and allowing me to pay for my lifestyle.

Study well the business model of the franchise. Here is the key to knowing if you are going to be able to withdraw money and thus control your finances. Check the business model that the franchisor shows you with some franchisees, in order to be as close as possible to what is really going to happen in your territory.

Bear in mind that most franchisors do not talk about the "extracash" that you will need to face the first months of starting your franchise in your territory. So take good advice about this surplus of money that you will have to have, because otherwise, you will have serious financial problems from the start. See a previous article of mine here.

That is why I spoke above about "leadership." The attitude with which you face daily problems will determine the profitability of your franchise.

Do not trust franchisors who tell you that you will get your investment back in one year. That is not serious and it does not happen anywhere in the world. I also wrote about this in a previous post.   Instead, trust the franchisor who tells you that your return on investment depends on the personal effort you put into your franchise. This is really serious and makes you the captain of your ship.

 

Thank you for reading!

You can check out my other posts here

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If you have any questions or comments, please feel free to leave them down below.

You can also contact me at gerardo.saporosi@gmail.com

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SirGerardThe1st
SirGerardThe1st

Franchise veteran, Dapps developer, DeFi evangelizer, Bitcoin and Ether since a long time


Franchise matters
Franchise matters

Reflections of a franchise industry's "Old Wolf", after 30 years in the international franchise business. All opinions are mine, and cover aspects that serve both franchisors and franchisees. Love for brands and entrepreneurs around the world.

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