Franchising offers a great path for young people to take on the challenge of business ownership with the support and backing of a franchise system. Before someone jumps into the franchise world, it’s important to know what that entails.
Sean Fitzgerald, CFE and Chief Development Strategist at No Limit Agency, shares his top tips for young franchisees to know about buying into a brand.
1. Franchise support.
Starting a business on your own is far more challenging than starting a franchise. One of the benefits of joining a franchise system according to Fitzgerald is having access to the benefits of working in a proven system and receiving support from brand and marketing assistance.
“In a small business you have to wear many hats,” said Fitzgerald. “In a franchise, you have the support and best practices of the company behind you.”
2. Success is not guaranteed.
Buying a franchise does not guarantee success. Franchising is a business model, and if it’s executed properly, it should yield good results. The only underlying variable is you, the franchisee and how you execute in the system.
3. Work hard.
After you sign on the dotted line, there is still work to be done to have a successful franchise business. It’s hard work and putting in the right effort.
“Be prepared to work harder than you have in your life,” said Fitzgerald. “The good news is your young and have energy. Be prepared for long hours and a lot of effort. It’s the hardest job you will ever have, and it could be the most rewarding.”
4. Do your homework.
Before you sign any franchise agreement, make sure to do the due diligence required for taking on this commitment.
Here are seven tips for doing due diligence on a franchise brand.
5. Make Friends.
It’s important to have a business advisor when you’re getting into franchising. If you’re going to buy a franchise, try to become friends or find a mentor in a system.
“Even though your buying into a system, there are best practices an experienced mentor can teach you and help you in the first years,” said Fitzgerald.
6. Be sure you are well capitalized.
There are many reasons why people run out of money. That’s why it’s important to be well capitalized and have access to additional rainy day funds when opening a franchise. That’s because, if you get yourself in a pinch you will need a resource to carry you through the tough times, says Fitzgerald. Don’t start with only enough to launch the franchise.
7. Follow the rules.
“If you’re a true entrepreneur, franchising is not for you,” said Fitzgerald. “If you don’t like following a process the franchise model is not for you.”
However, if you want to be an entrepreneur and run your own business franchising is a great way to own and run your own business.
8. Remember you’re the boss.
If you’re a young franchisee you could be hiring your peers. Make sure to draw a line between friends and employees.
9. Maintain strong communication with the franchisor.
If you need help ask for it. Fitzgerald suggests participating in any type of training, support or conference calls offered by the brand.
“Don’t put yourself on an island,” said Fitzgerald. “Don’t isolate yourself.”
10. Plan your exit strategy.
With all beginnings come endings. It’s important to plan for the end when starting a new business venture. Make sure you know where do you want to get your business to, when do you want to exit, and what’s your emergency exit plan if things don’t go well. Having a solid exit strategy will help you when your business journey evolves.
11. Be a leader.
Take responsibility for your business and your success. When you become a franchisee you’re becoming a business owner, and potentially leading a team under your direction.
“It’s your business in all aspects of it,” said Fitzgerald. “You have to make it happen. Don’t rely on anyone to solve your problems.”