Read advice from franchisees from Freedom Boat Club and Slater’s 20/20 on how to succeed in the first year of franchise ownership.
According to data from the International Franchise Association (IFA), more than 14,000 new franchisees are born each year. The beauty of the franchise model is that it allows aspiring entrepreneurs to achieve their dreams of business ownership with the comfort of a safety net in the franchisor. But even with the backing of a successful franchise brand, the first year as a franchisee can be incredibly stressful.
“When I bought my franchise, I still had those ‘oh my God, what am I doing?’ moments,” said Lisa Almeida, franchise owner of Freedom Boat Club in Jacksonville, Florida. “People think that buying a franchise gives you everything you need. But, you’re still running a business on your own, and during my first year, there were moments when we didn't know if we were going to make payroll. You’ll still have growing pains and things to learn when starting out.”
One major stressor in Almeida’s first year was capital. She encourages prospective franchisees to be properly capitalized and to avoid unnecessary stress by preparing to have more money than they think they need when starting out as a franchisee.
“We were really undercapitalized in the first year. If we had been better capitalized — or borrowed more, or saved more, it would have been easier to make it through the first year. We did it on a wing and a prayer and a string and caused so much stress,” she said.
Ted Cutting, franchise owner of Slater’s 50/50 in Pasadena, California, echoes Almeida’s sentiments, adding that in hindsight, he would have budgeted better, hired fewer, more productive employees and placed a premium on hard work. “Give more than you get the first few years. Run your business like it’s going out of business and you will never go out of business.”
Cutting also suggests that new franchisees focus on hands-on training in all aspects of their business so that they aren’t reliant on specific managers or staff members, and to spend as much time on site as possible. “Don’t be an absent franchise owner in your first year.”
In addition to spending time on location, new franchisees should make sure to leverage the resources they have available. When looking back at her first year, Almeida recalls that she didn’t reach out to the corporate office or ask for advice from other franchise owners in the network as much as she should have.
“Franchisees should realize that they have a network they can tap into who have walked in their shoes,” said Almeida. “As a franchisee, you get caught up in your own world and you’re spinning and you don’t stop and think. But they do have that support there for you.”
Even with the support of the franchisor, a playbook with proven systems and advice from other franchisees, franchisees are responsible for their own success -- and that success doesn’t always happen in the first year. In fact, Almeida recalls that she finally felt relief in her third year of operation. But, she knows that trusting her instincts is what got her to a success point.
“Any new franchise owner should listen to their gut — it knows the right answer. If you don’t feel good about something, whether it’s a specific advertising opportunity or a potential new hire, listen to your gut. Don’t be impatient — wait for the right opportunity or person. It pays off in the long run. In your first year as a franchisee, you will hit roadblocks and you will learn from them, and eventually, things will click. Everything was a learning opportunity and nothing was so catastrophic that it hurt the business in the long run.