Many people think of franchise opportunities as incredibly safe investments. While this is definitely true to an extent, no investment comes without a bit of risk and there is a lot to prepare for prior to entering a franchise structure. A few mistakes are commonly made by new entrepreneurs. Being mindful of them upfront ensures a higher chance of success with your business endeavor.
1. Anticipating Complete Autonomy
Franchisees often misinterpret being their own boss as having total control over every aspect of their business. While this may be the case when you are starting a business from scratch, it is never the case with a franchise. This is because the nature of the franchise model calls for franchisees to follow a demonstrated, tried-and-true course of action.
The proven success of the franchise is what makes being a franchisee low-risk. Ignoring the standards set by your franchisor means putting yourself at risk legally, as you sign a binding franchise agreement when you become a franchisee. Ask yourself prior to investing in a franchise how much control you are willing to give up as a boss.
2. Expecting the Franchisor to Handle Everything
On the other side of the coin, some franchisees enter their investment with the false assumption that the franchisor is responsible for taking care of everything. Franchisees have to be ready to step in as a leader for their franchise. You have to be ready to take on responsibilities such as hiring, managing day-to-day operations, finding a location for your business, and more. Your franchisor is there to provide you with the tools to succeed, but it's up to you to use them properly.
3. Not Contacting Existing Franchisees
When you are considering different franchises, don't forget to reach out to existing franchisees to learn more about their experience. If a franchisor is hesitant to provide you with contacts, it is safe to assume you should explore other business franchise opportunities.
Once a franchise has provided you with franchisees to contact, prepare some questions. Their answers will be born out of their positive or negative experiences with the franchise and will provide you with an accurate perspective on what it is actually like working under a certain brand. Ask about the franchisees' backgrounds. If any of them align with yours, it is likely that their time working with their franchise will provide you with enlightening insight.
4. Thinking That Bigger Is Always Better
A lesson all franchisees must learn is that the biggest and most popular franchise opportunities may not be for you. There are common franchises that many people have found success with, but you should take your personal background, passions, and expertise into account when deciding which franchise opportunities to invest in. According to Fortunly, 10.5% of all businesses in the US are franchises. This means that your options extend beyond restaurant franchising.
Now that you know what mistakes to avoid, you can enter your franchise agreement with appropriate expectations. We at Franchise Recovery aim to do all that we can to make starting out with a franchise a simple process.
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