Acquiring a franchise is a big decision. Maybe as big as life-changing for some because usually a lot of money is involved. Obviously, it is a decision that shouldn’t be made lightly, much less under-estimate certain aspects from the start which could leave you unprepared and have major implications in the following months after your grand opening.
Most prospective franchisees make the mistake of underestimating the amount of time that is required from them to commit to the franchise business. While the franchisor provides you with a well-known brand that has a proven business model and attractive products, and even lays out the operational processes, you still need to learn the business and dedicate yourself to good ol’ hard work to connect with the community. If you’re thinking working overtime is a thing of the past, perhaps it might be a good idea to start clearing up that schedule.
Alternatively, to free up more time for yourself, you could always hire someone to handle the management aspects of your franchise business. But hiring a +1 means additional employee expenses that you probably weren’t prepare to take on in the first place. Which brings us to the next point.
Just because your business is part of a well-known brand doesn’t guarantee customers will come pouring through your doors immediately. Unfortunately, this is a common misconception among prospective franchisees. Being confident that your shiny new investment will be a success is a good thing, this means you believe in the franchise and its products. However, stepping over the line into over-confidence might result in lacklustre planning to be financially adequate for the starting few months. And this could be one heck of a business killer.
For every business, there is often a ramp-up phase before the business finds it feet. During this phase, revenue levels will not be optimal but fixed operational expenses, such as rent payments and salaries, will still need to be met. What this means is there’s every chance that you’ll be bleeding money at the start so be prepared to dip into a readily available rainy day fund until the business starts to hit its stride. How much additional funds to set aside is a conversation you need to have with the franchisor, and that’s what they are there for - advice.
Deviations From The System
By making all the franchise payments to the franchisor, what you are getting back in return is their industry knowledge, business experience and operational assistance. While not a guarantee for success, franchisors help to re-create the same environment and formula that has proven to be a success, and also help you to avoid the mistakes they wished they didn’t make in getting to where they are now.
So by deviating from the required standards, it’s really messing with something that works. Changes, however small or insignificant it may seem, could have a negative impact on your business, or even the whole franchise system. If you think you can do it better or want to do it your way, don’t take up the franchise and set up your own standalone operations instead. Franchisees play the role of a follower and you need to accept it.
Nevertheless, if there is something in you have in mind that you believe could change the franchise system for the better, submit the suggestion to the franchisor and let them figure out the feasibility of the plan. If it’s a go ahead, great. If not, willfully deviating from the stated requirements might cost you your franchise investment, and that’s not even the worst that could happen.